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Tri-Agency Proposed Rule on Health Reimbursement Arrangements

The Department of the Treasury (Treasury), Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) released their proposed rule regarding health reimbursement arrangements (HRAs) and other account-based group health plans. The DOL also issued a news release and fact sheeton the proposed rule.

The proposed rule’s goal is to expand the flexibility and use of HRAs to provide individuals with additional options to obtain quality, affordable healthcare. According to the Departments, these changes will facilitate a more efficient healthcare system by increasing employees’ consumer choice and promoting healthcare market competition by adding employer options.

To do so, the proposed rules would expand the use of HRAs by:

Removing the current prohibition against integrating an HRA with individual health insurance coverage (individual coverage)

Providing premium tax credit (PTC) eligibility rules for people who are offered an HRA integrated with individual coverage

Assuring HRA and Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) plan sponsors that reimbursement of individual coverage by the HRA or QSEHRA does not become part of an ERISA plan when certain conditions are met

Changing individual market special enrollment periods for individuals who gain access to HRAs integrated with individual coverage or who are provided QSEHRAs

Public comments are due by December 28, 2018. If the proposed rule is finalized, it will be effective for plan years beginning on or after January 1, 2020.